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A stock has a required return of 10.5%, the risk-free rate is 2.5%, and the market risk premium is 4%. a. What is the stocks

A stock has a required return of 10.5%, the risk-free rate is 2.5%, and the market risk premium is 4%.

a. What is the stocks beta?

b. If the market risk premium increased to 5%, what would happened to the stocks required rate of return? Assume that the risk-free rate and the beta remain unchanged.

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